No More Open Homes
Once your real estate agent has received confirmation from the purchasers solicitor that all the conditions are satisfied, your property is officially sold! That means see you later to open homes and hello to packing.
Finances
- The buyer’s deposit is usually paid to your agent’s trust account when the sale and purchase agreement is signed or when the agreement goes unconditional. The agent will deduct their commission fee from the deposit.
- You must make sure all charges on the property are fully paid, including electricity, gas and rates. Rates charges can be passed on to the buyer if these have been paid in advance.
- Make sure there is no money owing on any chattels listed in the sale and purchase agreement.
- If your property is rented and your tenant is staying on under the new ownership, you must notify the tenant and transfer the bond to the buyer. You must provide the buyer with a copy of the tenancy agreement. You are only entitled to collect rent up to settlement day, so if your tenant has paid you rent in advance, you will need to pass this on to the buyer.
- You are responsible for the property and chattels and insurance of these until settlement day. You can cancel your insurance after settlement day when the buyer’s insurance cover will begin.
The settlement process
Pre-settlement inspection
The pre-settlement inspection is a chance for the buyer to check that the property and chattels are in the same condition they were when they signed the sale and purchase agreement, and that you have met any conditions listed in the agreement. If there is any significant damage or if a condition has not been met, the buyer may be entitled to compensation from you. The inspection is not an opportunity for the buyer to uncover problems that already existed when they signed the sale and purchase agreement.
The pre-settlement inspection is usually at least 2 working days before the settlement date so there is time for any issues to be addressed.
If the property is being sold with a tenancy that will continue when the buyer takes over the property, the buyer may not be entitled to a pre-settlement inspection. If the tenancy will end before or on settlement day, the buyer should have the right to an inspection. You will have to get your tenant’s consent to show the buyer the property and give the tenants a reasonable amount of notice.
Things the buyer may look for in the pre-settlement inspection
The buyer is likely to:
- check that the property is in the same condition as it was when they signed the sale and purchase agreement
- make sure that all the chattels listed on the sale and purchase agreement are in the property and are in good working order (unless it has been agreed and documented otherwise)
- check that fixtures such as lights work too
- check if there is any property damage since the sale and purchase agreement was signed, for example storm or earthquake damage, or damage caused when the previous occupants moved out
- check you have completed any maintenance or repairs to the property that you agreed to as part of the sale and purchase agreement conditions
- check all the previous occupant’s belongings (not included in the sale) and rubbish have been removed from the property
- make sure all keys, garage door remotes and security alarm codes are accounted for and will be available to them on settlement day.
It’s a good idea to refer to the sale and purchase agreement for details of any conditions and chattels.
If there are issues during the pre-settlement inspection
If the buyer finds damage during their pre-settlement inspection (that wasn’t present when they signed the sale and purchase agreement) or if a chattel is missing, this could delay settlement. Your agent will outline your options and can negotiate with the buyer’s lawyer or conveyancer to rectify the situation.
You can choose to fix any damage immediately, or you may agree that the cost of fixing the issue can be deducted from the final payment the buyer makes.
Having the final inspection at least 48 hours before settlement gives you and the buyer time to reach agreement about any issues.
Your support team
Your lawyer or conveyancer will help
Your lawyer or conveyancer will work with the buyer’s lawyer or conveyancer to make sure all the paperwork and payments are completed on settlement day. You will need to visit your lawyer or conveyancer before settlement to sign an authority for your lawyer or conveyancer to transfer the record of title. You will also need to provide information about your tax status and may need to sign a form about this.
Your lawyer or conveyancer will need to verify your identity before they do this work. See your lawyer or conveyancer early to save time during the settlement process.
Your agent’s role
Your agent will answer any questions you have about settlement and what you must do before settlement day.
Other things to do before settlement day
- Book a moving company, if you are using one, and plan the actual move.
- Think about care for children and pets on the day.
- We recommend that you plan to move out before settlement to make things less stressful on the day. If there are any delays and the property isn’t vacant on settlement day, you may be liable to pay compensation to the buyer.
- Your property must be left tidy with all rubbish removed. Check the sale and purchase agreement for any additional requirements about cleaning.
- Arrange final readings and payments for utilities such as gas, electricity, water and phone/broadband.
- Change the address of your contents insurance, and make sure it includes cover during the move.
- Arrange for your mail to be redirected to your new address.
- Notify the council and arrange for your final rates bill. If you have paid rates in advance, these can be recovered from the buyer. Ask your lawyer or conveyancer about this.
Your property has sold, congratulations! As soon as the purchase price is confirmed as paid on settlement day, you hand the keys over and the sale is complete. You can now get your moving plans underway.
Selling your home may seem daunting at first but it doesn’t t need to be, if you have the right advice and support throughout the process. An experienced agent will guide you through the sale and make sure you get the best price for your property so you can get on with planning your move.
